DVN Dividend

DEVON ENERGY dividend

Although DVN has a dividend of 0.08 with an ex-dividend date of Dec 13, you can sell covered calls on DEVON ENERGY to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 12:25 PM ET):

DEVON ENERGY (DVN)
Bid Ask Last Change Volume P/E Market Cap
36.49 36.50 36.50 -0.13 2.2M - 18B

DVN Dividend-Like Income Using Covered Calls

With DVN at 36.50, here's a table showing how big the annual "dividend" (ie. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:

Annual Yield Annual Premium Cents/Day
3% 1.10 0.3
5% 1.83 0.5
10% 3.65 1.0

So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:

3% Yield On DVN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 43.00 0.02 5 0.4 6.50 (17.8%)
Oct 26 42.00 0.04 12 0.3 5.50 (15.1%)
5% Yield On DVN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 40.00 0.03 5 0.6 3.50 (9.6%)
Oct 26 41.50 0.06 12 0.5 5.00 (13.7%)
10% Yield On DVN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 39.50 0.05 5 1.0 3.00 (8.2%)
Oct 26 40.00 0.14 12 1.2 3.50 (9.6%)

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